Southampton, Pa., USA, February 25, 2015 – Environmental Tectonics Corporation’s (OTC Pink: ETCC) (“ETC” or the “Company”) Simulation Division, located in Orlando, Fla., has delivered to the Netherlands Institute for Safety (“IFV”), new wildland fire simulation scenarios including four different types of vegetation. The forest fire training scenarios are an expansion to their existing Advanced Disaster Management Simulator (“ADMS™”).

The simulation features tested vegetation burn rates calculated using existing fuel models that have been researched and validated by IFV including comparisons of test burns and naturally occurring wildfires. The fire spread characteristics are also affected by varying wind speed and direction. The vegetation zones feature deciduous forests, pine forests, heather fields, and an area of mixed vegetation.

In addition to the new wildland fire capabilities, new objects have been added to the SmartModel™ Library to add complexity within training exercises and provide responders with additional tools to mitigate a forest fire. The new objects include various houses that can be placed in the path of a fire or in neighboring areas, burned trees and vegetation, as well as plowed terrain fire break paths to control ground fires. Responders will also be able to call for aerial firefighting support by helicopters using water buckets to combat these fires.

“Over the past few years we have seen how the fuel models can be used to train firefighters for wildfires in the Netherlands as well as exercising other agencies in their wildfire response.” said Elly Praasterink, Advisor with IFV. “By integrating the fuel model into the ADMS simulation, we can create real-time virtual scenarios to train any responder in handling the elements of a wildfire.”

IFV is a national center of expertise with four Academies including the Fire Academy, Academy for Crisis Management, Emergency Medical Service Academy, and Academy for Leadership. With over 30 ADMS training systems, IFV has trained thousands of emergency management and response teams since 2001.

SOUTHAMPTON, PA, USA, January 30, 2015 – Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) today reported its financial results for its fiscal 2015 third quarter ended November 28, 2015 (the “2015 third quarter”) and the thirty-nine week period ended November 28, 2014 (the “2015 first three quarters”).

Fiscal 2015 Third Quarter Results of Operations

Net (Loss) Income Attributable to ETC

Net loss attributable to ETC was $1.7 million, or $0.12 diluted loss per share, in the 2015 third quarter, compared to $136 thousand of net income attributable to ETC during the 2014 third quarter, equating to $0.00 diluted earnings per share. The $1.9 million variance reflects a decrease in income before income taxes of $3.2 million due to a $2.7 million decrease in gross profit, resulting from a combination of both lower net sales and lower gross profit margin percentage, as well as a $0.5 million increase in operating expenses. The $3.2 million decrease in income before income taxes was offset, in part, by a $1.3 million variance between the income tax benefit recorded in the 2015 third quarter and the income tax expense recorded in the 2014 third quarter.

Net Sales

Net sales in the 2015 third quarter were $7.8 million, a decrease of $4.5 million, or 36.5%, compared to 2014 third quarter net sales of $12.3 million. The reduction reflects decreased ATS and Environmental sales to the U.S. Government and decreased International sales in general, offset in part, by increased Domestic sales, especially within the Simulation business unit. Given the current progress made on U.S. Government contracts in the Company’s sales backlog, and increased International sales activity, the Company anticipates the concentration of sales to the U.S. Government will continue to lessen in fiscal 2015.

Gross Profit

Gross profit for the 2015 third quarter was $0.9 million compared to $3.6 million in the 2014 third quarter, a decrease of $2.7 million, or 74.5%. The significant decrease in gross profit was a combination of both lower net sales and lower gross profit margin percentage due to inefficiencies as a result of additional work required on several contracts, for which we are currently pursuing recovery. On April 24, 2014, we reached a favorable settlement agreement on the first of these recoveries that partially offset the effects of the additional work. Further, the Company is now in the testing phase with one of these contracts, and will shortly be in testing phase on another. Gross profit margin as a percentage of net sales decreased to 11.5% for the 2015 third quarter compared to 28.8% for the 2014 third quarter.

Operating Expenses

Operating expenses, including sales and marketing, general and administrative, and research and development, for the 2015 third quarter were $3.5 million, an increase of $0.5 million, or 17.8%, compared to $3.0 million for the 2014 third quarter. The increase is the combined result of a one-time commission paid on a large International ILS contract, expenses related to the recently announced management transition, and a non-cash expense related to a change in the Company’s vacation policy.

Interest Expense, Net

Interest expense, net, for the 2015 third quarter was $180 thousand compared to $224 thousand in the 2014 third quarter, a decrease of $44 thousand, or 19.6%, due primarily to a lower level of bank borrowing.

Fiscal 2015 First Three Quarters Results of Operations

Net (Loss) Income Attributable to ETC

Net loss attributable to ETC was $2.9 million, or $0.21 diluted loss per share, in the 2015 first three quarters, compared to $0.3 million of net income attributable to ETC during the 2014 first three quarters, equating to $0.00 diluted earnings per share. The $3.2 million variance reflects a decrease in income before income taxes of $5.4 million due primarily to a $5.3 million decrease in gross profit, resulting from a combination of both lower net sales and lower gross profit margin percentage, as well as a $0.2 million increase in operating expenses. The $5.4 million decrease in income before income taxes was offset, in part, by a $2.2 million variance between the income tax benefit recorded in the 2015 first three quarters and the income tax expense recorded in the 2014 first three quarters.

Net Sales

Net sales in the 2015 first three quarters were $28.0 million, a decrease of $8.6 million, or 23.6%, compared to 2014 first three quarters net sales of $36.6 million. The reduction reflects decreased ATS sales to the U.S. Government and International customers, decreased sales of monoplace chambers to both Domestic and International customers, and decreased sales of Sterilization Systems to International customers, offset in part, by increased sales of Sterilization Systems and Environmental Testing and Simulation Systems to Domestic customers. Given the current progress made on U.S. Government contracts in the Company’s sales backlog, and increased International sales activity, the Company anticipates the concentration of sales to the U.S. Government will continue to lessen in fiscal 2015.

Gross Profit

Gross profit for the 2015 first three quarters was $5.7 million compared to $11.0 million in the 2014 first three quarters, a decrease of $5.3 million, or 48.3%. The significant decrease in gross profit was a combination of both lower net sales and lower gross profit margin percentage due to inefficiencies as a result of additional work required on several contracts, for which we are currently pursuing recovery. On April 24, 2014, we reached a favorable settlement agreement on the first of these recoveries that partially offset the effects of the additional work. Further, the Company is now in the testing phase with one of these contracts, and will shortly be in testing phase on another. Gross profit margin as a percentage of net sales decreased to 20.2% for the 2015 first three quarters compared to 29.9% for the 2014 first three quarters.

Operating Expenses

Operating expenses, including sales and marketing, general and administrative, and research and development, for the 2015 first three quarters were $9.7 million, an increase of $0.2 million, or 1.9%, compared to $9.5 million for the 2014 first three quarters. The increase is the combined result of an increase in commissions expense as the concentration of net sales shifts from Government to International and an increase in legal fees associated primarily with the aforementioned recovery effort, offset in part, by an on-going effort to reduce non-revenue generating expenses.

Interest Expense, Net

Interest expense, net, for the 2015 first three quarters was $477 thousand compared to $590 thousand in the 2014 first three quarters, a decrease of $113 thousand, or 19.2%, due primarily to a lower level of bank borrowing.

Cash Flows from Operating, Investing, and Financing Activities

During the 2015 first three quarters, as a result of a decrease in accounts receivable and costs and estimated earnings in excess of billings on uncompleted long-term percentage of completion (“POC”) contracts, the Company generated $1.7 million of cash from operating activities compared to $3.9 million of cash used in operating activities during the 2014 first three quarters. Under POC revenue recognition, these accounts represent the timing differences of spending on production activities versus the collecting of customer payments.

Cash used for investing activities primarily relates to funds used for capital expenditures of equipment and software development. The Company’s investing activities used $1.1 million in both the 2015 first three quarters and the 2014 first three quarters.

The Company’s financing activities used $0.5 million of cash in the 2015 first three quarters, which primarily reflected payments on the Term Loan and repayments under the Company’s various lines of credit, and was offset, in part, by a decrease in restricted cash. In the 2014 first three quarters, net cash provided by financing activities totaled $3.4 million, primarily from borrowings under the Company’s various lines of credit and a decrease in restricted cash, offset in part, by payments on the Term Loan.

SOUTHAMPTON, PA, USA, January 15, 2015 – Aircrew Training Systems (“ATS”), a division of Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”), announced today that it signed a contract with the Air Force Life Cycle Management Center (“AFLCMC”) to provide a fifth spatial disorientation flight simulator following a recent award of four devices earlier this fiscal year. The AFLCMC selected ETC`s GYRO IPT II (Integrated Physiological Trainer) to fulfill the requirements of their new Spatial Disorientation (SD) Training System Program. The GYRO IPT II will support the SD training requirements in the Air Education and Training Command Student Undergraduate Pilot Training syllabus. The system will expose undergraduate pilots and aircrew to typical vestibular and visual illusions found in aviation, enabling them to recognize, confirm, prevent, and recover from SD. The additional unit is also scheduled for delivery to Randolph AFB TX by the end of 2015.

“The award of a fifth system demonstrates the importance of this type of training for the USAF,” said Alper Kus, Vice President of ATS. “Spatial disorientation is a major contributor to aircraft mishaps and these devices will prepare pilots to better manage whatever comes their way, ultimately leading to increased safety.”

ETC’s GYRO IPT II provides pilots with a hands-on, realistic, full motion, spatial disorientation flight training experience. While in control of a simulated flight, the pilot can be exposed to a variety of selected disorienting illusions. Unlike simple disorientation demonstrators, a pilot in the GYRO IPT II has full closed loop control of the simulation before, during, and after the illusion. This capability creates a fully interactive flight training environment where the pilot must maintain control of the simulator and fly through the illusion to a successful resolution during training.

SOUTHAMPTON, PA, USA, January 9, 2015 – Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) today announced that James (“Jim”) R. Wells, Vice President, General Counsel, Chief Compliance Officer, and Corporate Secretary has resigned, in order to become General Counsel of ARI based in Mt. Laurel, NJ. Founded in 1948 by Holman Automotive Group, ARI is the largest privately held vehicle fleet management service company in the world.

Robert L. Laurent, Jr., Chief Executive Officer, President, and Director, said “During his tenure at ETC, Jim provided sound advice and strong leadership in positioning the Company for enhanced growth. We will miss him. We are engaging in a search for a new General Counsel, and Jim has been very helpful in that process.”

Southampton, Pa., USA, December 2, 2014 – Environmental Tectonics Corporation’s (OTC Pink: ETCC) (“ETC” or the “Company”) Simulation Division, located in Orlando, Fla., has been awarded a contract by the United States Air Force Civil Engineering Center (“AFCEC”) located at Tyndall Air Force Base to deliver an Airfield Damage Repair (“ADR”) Simulator. The virtual reality simulator will be used to train Air Force Civil Engineering staff to effectively command and Control ADR operations, assuring that mission critical airfield infrastructure, including runways and taxiways, are restored rapidly under any conditions.

The ADR training system will be based on the proven Advanced Disaster Management Simulator (“ADMS™”) system currently used at the United States Department of Defense (“DoD”) Fire Academy located at Goodfellow Air Force Base. The ADMS-Airbase system, which includes the fictitious Norma Brown Airbase tabletop model, will be modified to meet the new ADR requirements, including the addition of multiple ADR teams, vehicles and warehouses stocked with the supplies necessary for various types of repairs.

New objects will be added to the SmartModel™ Library, including craters of various sizes and types, and explosive ordnance devices which can be inserted into the exercise to further challenge trainees. In addition, the implementation of a faster-than-real-time exercise clock will allow the training exercise to be compressed into a shorter period while still tracking the real-world time of each action and decision that the trainees make.

“We are very pleased with this opportunity to support AFCEC in their efforts to modernize and enhance the current ADR training program. This requirement will amplify the core capabilities of our ADMS system and extend the benefits of training with ADMS-Airbase to additional areas within the DoD. We appreciate the continued trust that the USAF has placed in our company, and we are committed to delivering a training solution that will assist AFCEC in being mission ready at all times.” said Lori Bozenbury, Director of Business Development at ETC Simulation.

]]>https://www.etcusa.com/etc-simulation-contracted-by-united-states-air-force-civil-engineering-center-to-deliver-airfield-damage-repair-simulation-training-system/feed/0ETC Simulation Recognized As a Top Simulation and Training Company by Military Training Technology for 2nd Consecutive Yearhttps://www.etcusa.com/etc-simulation-recognized-as-a-top-simulation-and-training-company-by-military-training-technology-for-2nd-consecutive-year/ https://www.etcusa.com/etc-simulation-recognized-as-a-top-simulation-and-training-company-by-military-training-technology-for-2nd-consecutive-year/#commentsWed, 26 Nov 2014 14:57:59 +0000https://www.etcusa.com/?p=3949Continue reading →]]>

Southampton, Pa., USA, November 25, 2014 – Environmental Tectonics Corporation’s (OTC Pink: ETCC) (“ETC” or the “Company”) Simulation Division, located in Orlando, Fla., today announced that they have been honored for a second consecutive year by Military Training Technology (MT2) magazine for their technological contributions to the military training community. ETC Simulation is the developer of the Advanced Disaster Management Simulator (ADMS™), a virtual reality training system for emergency response, disaster management, and homeland security.

This year’s award was based on a combination of a new firefighting simulator and newly added capabilities to the ADMS system. The new capabilities, including a thermal imaging view and the simulation of a Remote Control Vehicle for Explosive Ordnance Disposal operations, were introduced based on the evolving requirements of current ADMS Users. ETC Simulation’s newest product, ADMS-Fire, is the augmented reality firefighter training simulator that provides firefighters with an effective training system for tactical firefighting and ventilation techniques. ADMS-Fire uses motion-based sensor technology to provide the most realistic virtual reality training experience available today.

“It is our ambition to provide effective training solutions to both military and civil organizations, from the first responder level up to strategic decision makers,” said Marco van Wijngaarden, President of ETC Simulation. “We do that by creating innovative solutions built on our proven ADMS simulation platform that has been around for 20 years. Using one platform allows us to combine and expand any of the simulators we build. We have a great team of enthusiastic people here at ETC, always looking for the next generation of simulation, and we are grateful to be recognized for that by MT2. We thank Military Training Technology greatly for again recognizing our innovation and success.”

Military Training Technology is a magazine dedicated to military training as a critical component of command readiness and service transformation. The annual MT2 Top Simulation and Training Companies program recognizes the performance within the global training community of businesses that supply products or services to the military training community.

SOUTHAMPTON, PA, USA, November 14, 2014 – Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) today reported its financial results for its fiscal 2015 second quarter ended August 29, 2014 (the “2015 second quarter”) and the twenty-six week period ended August 29, 2014 (the “2015 first half”).

Fiscal 2015 Second Quarter Results of Operations

Net (Loss) Income Attributable to ETC Net loss attributable to ETC was $939 thousand, or $0.07 diluted loss per share, in the 2015 second quarter, compared to $140 thousand of net income attributable to ETC during its fiscal 2014 second quarter ended August 30, 2013 (the “2014 second quarter”), equating to a $0.00 diluted earnings per share. The $1.1 million variance reflects a decrease in income before income taxes of $1.8 million due almost entirely to a decrease in gross profit, resulting from a combination of both lower net sales and lower gross profit margin percentage, as well as a slight increase in sales and marketing expenses. The $1.8 million decrease in income before income taxes was offset, in part, by a $0.7 million variance between the income tax benefit recorded in the 2015 second quarter and the income tax expense recorded in the 2014 second quarter.

Net Sales Net sales in the 2015 second quarter were $9.5 million, a decrease of $2.2 million, or 19.2%, compared to 2014 second quarter net sales of $11.7 million. The reduction reflects decreased ATS sales to the U.S. Government and International customers, and decreased sales of monoplace chambers to both Domestic and International customers, offset in part, by increased sales of our other Commercial/Industrial products to Domestic customers. Given the current progress made on U.S. Government contracts in the Company’s sales backlog, the Company anticipates the concentration of sales to the U.S. Government will continue to lessen in fiscal 2015.

Gross Profit Gross profit for the 2015 second quarter was $1.9 million compared to $3.7 million in the 2014 second quarter, a decrease of $1.8 million, or 47.5%. The significant decrease in gross profit was a combination of both lower net sales and lower gross profit margin percentage due to inefficiencies as a result of additional work required on several contracts, for which we are currently pursuing recovery. On April 24, 2014, we reached a favorable settlement agreement on the first of these recoveries that partially offset the effects of the additional work. Gross profit margin as a percentage of net sales decreased to 20.5% for the 2015 second quarter compared to 31.6% for the 2014 second quarter.

Operating Expenses Operating expenses, including sales and marketing, general and administrative, and research and development, for the 2015 second quarter were $3.3 million, an increase of $134 thousand, or 4.3%, compared to $3.1 million for the 2014 second quarter. The increase is primarily the result of a one-time commission paid on a large International ATS contract.

Interest Expense, Net Interest expense, net, for the 2015 second quarter was $148 thousand compared to $194 thousand in the 2014 second quarter, a decrease of $46 thousand, or 23.7%, due primarily to a lower level of bank borrowing.

Fiscal 2015 First Half Results of Operations

Net (Loss) Income Attributable to ETC Net loss attributable to ETC was $1.1 million, or $0.09 diluted loss per share, in the 2015 first half, compared to $0.2 million of net income attributable to ETC during the twenty-seven weeks ended August 30, 2013 (the “2014 first half”), equating to a $0.01 diluted loss per share. The $1.3 million variance reflects a decrease in income before income taxes of $2.2 million due primarily to a $2.6 million decrease in gross profit, resulting from a combination of both lower net sales and lower gross profit margin percentage, offset in part, by a $0.4 million decrease in operating expenses, resulting from an on-going effort to reduce non-revenue generating expenses. The $2.2 million decrease in income before income taxes was offset, in part, by a $0.9 million variance between the income tax benefit recorded in the 2015 first half and the income tax expense recorded in the 2014 first half.

Net Sales Net sales in the 2015 first half were $20.1 million, a decrease of $4.2 million, or 17.1%, compared to 2014 first half net sales of $24.3 million. The reduction reflects decreased ATS sales to the U.S. Government and International customers, decreased sales of monoplace chambers to both Domestic and International customers, and decreased sales of Sterilization Systems to International customers, offset in part, by increased sales of Sterilization Systems and Environmental Testing and Simulation Systems to Domestic customers. Given the current progress made on U.S. Government contracts in the Company’s sales backlog, the Company anticipates the concentration of sales to the U.S. Government will continue to lessen in fiscal 2015.

Gross Profit Gross profit for the 2015 first half was $4.8 million compared to $7.4 million in the 2014 first half, a decrease of $2.6 million, or 35.7%. The significant decrease in gross profit was a combination of both lower net sales and lower gross profit margin percentage due to inefficiencies as a result of additional work required on several contracts, for which we are currently pursuing recovery. On April 24, 2014, we reached a favorable settlement agreement on the first of these recoveries that partially offset the effects of the additional work. Gross profit margin as a percentage of net sales decreased to 23.6% for the 2015 first half compared to 30.5% for the 2014 first half.

Operating Expenses Operating expenses, including sales and marketing, general and administrative, and research and development, for the 2015 first half were $6.2 million, a decrease of $0.4 million, or 5.2%, compared to $6.6 million for the 2014 first half. The decrease is primarily the result of an on-going effort to reduce non-revenue generating expenses, offset in part, by a one-time commission paid on a large International ATS contract and an increase in legal fees associated primarily with the aforementioned recovery effort.

Interest Expense, Net Interest expense, net, for the 2015 first half was $297 thousand compared to $366 thousand in the 2014 first half, a decrease of $69 thousand, or 18.9%, due primarily to a lower level of bank borrowing.

Cash Flows from Operating, Investing, and Financing Activities During the 2015 first half, as a result of a decrease in accounts receivable and costs and estimated earnings in excess of billings on uncompleted long-term percentage of completion (“POC”) contracts, the Company generated $1.5 million of cash from operating activities compared to $3.5 million of cash used in operating activities during the 2014 first half. Under POC revenue recognition, these accounts represent the timing differences of spending on production activities versus the collecting of customer payments.

Cash used for investing activities primarily relates to funds used for capital expenditures of equipment and software development. The Company’s investing activities used $0.7 million in the 2015 first half compared to $0.6 million in the 2014 first half.

The Company’s financing activities used $1.3 million of cash in the 2015 first half, which primarily reflected payments on the Term Loan, and was offset, in part, by a decrease in restricted cash. In the 2014 first half, net cash provided by financing activities totaled $2.8 million, primarily from borrowings under the Company’s various lines of credit and a decrease in restricted cash, offset in part, by payments on the Term Loan.

Financial Restructuring On November 5, 2014, the Company entered into an amendment to the September 28, 2012 Loan Agreement that provided for, among other things, the following:

A new $11.7 million Committed Line of Credit (the “Committed Line of Credit”) under which the Company will cover both its existing $2.1 million in standby letters of credit, as well as future standby letters of credit that will be needed shortly in conjunction with significant orders received since August 29, 2014.

The Committed Line of Credit will be collateralized by H.F. “Gerry” Lenfest, a major shareholder and Chairman of the Company’s Board of Directors, until such time the Company is in position to pledge its own cash collateral.

The Company’s existing Line of Credit with PNC Bank was decreased from $15.5 million to $13.5 million; however, $2.1 million of funds deemed to have been restricted as of August 29, 2014 is now considered unrestricted and will be used as working capital.

No monthly principal payments shall be due and payable on the existing Term Loan from September 29, 2014 through October 27, 2015. Monthly principal payments will commence on October 28, 2015, and continue for each succeeding month thereafter. Interest shall still be payable on a monthly basis, regardless of whether or not any principal payment is due. Any outstanding principal and accrued interest shall be due and payable in full on September 28, 2017, which is the current maturity date.

The Company received a waiver as of the fiscal quarter ended August 29, 2014 for exceeding the permitted maximum Operating Leverage Ratio and for failing to exceed the permitted minimum Fixed Charge Coverage Ratio. Going forward, ETC must maintain at all times a minimum Consolidated Tangible Net Worth of $20.0 million; further, commencing with the fiscal quarter ending August 28, 2015, ETC must maintain as of the end of each fiscal quarter, an Operating Leverage Ratio not greater than 3.00 to 1 and a Fixed Charge Coverage Ratio of at least 1.00 to 1. This ratio will increase to 1.10 to 1 on November 27, 2015, and will remain at that level at all times thereafter.

Effective as of the date of this amendment, the interest rate on all PNC Lines of Credit, as well as the Term Loan Note, will be based on the PNC Daily Libor Rate plus a margin of 4.00%.

SOUTHAMPTON, PA, USA, November 5, 2014 – Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) announces Kenneth L. Ginader, CAPT USN (Ret), Director of Business Development for Tactical Flight Training Systems, is scheduled on Tuesday, December 2, 2014 at 4:00 p.m. EST to give a presentation titled “Dynamic Flight Simulation: 45 Years of Research and Development” as part of a series entitled “Best Simulator Technologies Ever” at the NTSA’s I/ITSEC Conference in Orlando, FL.

Designated for Continuing Education Units (CEUs) or Continuous Learning Points (CLPs), Captain Ginader’s session will discuss the development of technologies available for the next generation of flight simulation, providing realistic training as it is combined with physical and physiological stressors. Captain Ginader will also cover the results of recent research conducted by ETC’s team of researchers on the effectiveness of “next generation” simulation training. Topics will include advancements in dynamic motion for flight simulators, the distinct differences between transient motion cueing and G on Demand motion advantages, the misnomer that motion cueing provides G forces, and the limitations of transient motion cueing in hexapod motion-based simulator versus the realistic motion required for tactical flight training.

The Interservice/Industry Training, Simulation and Education Conference (I/ITSEC) promotes cooperation among the Armed Services, Industry, Academia, and various Government agencies in pursuit of improved training and education programs, identification of common training issues, and development of multiservice programs. Additional information as well as registration for the event can be found at the event’s website.

SOUTHAMPTON, PA, USA, October 15, 2014 – Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) announced today the recent award of a new contract totaling in excess of $1 million for the Sterilization Systems Group (“SSG”).

The project includes upgrading four (4) 100% Ethylene Oxide sterilizer control systems with ETC’s Pro-GENESIS Advantage™ and integration of preconditioning and aeration rooms monitoring systems into one Supervisory Control and Data Acquisition (SCADA) System. The system includes an interface with the clients Production and Scheduling system. The new control schema will allow the customer to integrate disparate operations and information into one data warehouse and to consolidate all process information and reporting while meeting new industry standards for control and electronic recordkeeping.

David Mitchell, Vice President and Business Unit Manager of ETC’s SSG stated, “This year has seen many new contracts for Ethylene Oxide sterilization control systems. Our investment in control system technology has put ETC at the front of the market for new controls at a time when older legacy systems have reached the end of their useful life. With this new project, ETC will have fifty-seven (57) Advantage systems in operation and validated in the Ethylene Oxide Sterilization System industry.”

SOUTHAMPTON, PA, USA, October 8, 2014 – Environmental Tectonics Corporation’s (OTC Pink: ETCC) (“ETC” or the “Company”) Simulation Division (“ETC Simulation”), located in Orlando, FL, has been contracted through Adayana Government Group by the U.S. DoD Fire Academy located at Goodfellow Air Force Base to expand their Advanced Disaster Management Simulator (“ADMS”). ADMS is used to train Fire Officers both at the Louis F. Garland DoD Fire Academy and off base by Mobile Training Teams. This expansion includes the addition of four structural emergency scenarios.

The new scenarios include a hospital, prison, theater, and a sports hall. The hospital scenario will include a variety of emergencies in that environment including a medical helicopter crash. At the theater and sport hall, trainees will be faced with an active shooter, mass evacuation, and crowd control scenarios. The prison will prepare trainees for incidents involving force protection within secure areas.

The additional scenarios feature ETC’s Signature Simulation Technology and the new SmartModel™ library, which enhances exercise creativity by allowing unlimited scenario capabilities. The SmartModel library allows different variables to be placed into the scenario, including an active shooter with a suspicious package. Adding these variables provides the trainees with evolving challenges and allows the scenario to be different each time it is run.

“We are very pleased that the DoD Fire Academy is happy with their ADMS training systems and are growing their training capabilities by adding more structural incidents to the Norma Brown virtual airbase.” said Marco van Wijngaarden, President of ETC Simulation. “Scenario design will be done in close cooperation with the subject matter experts of the DoD Fire Academy for the best possible training effect.”

SOUTHAMPTON, PA, USA, September 19, 2014 – Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) announces that William F. Mitchell, Sr. has retired and has resigned from the Board of Directors of the Company. The Company previously announced a management transition, whereby Mr. Mitchell stepped down as Chairman of the Board and Chief Executive Officer of the Company.

William (“Bill”) F. Mitchell, Sr. founded the Company in 1969, and has led the company to a strong position in simulated environments for training, testing, and research & development, for a variety of niche aeromedical and commercial / industrial markets worldwide. Though Mr. Mitchell has retired and stepped down from all duties, Mr. Mitchell will be engaged as a senior technical consultant to the Company. Mr. Mitchell`s consulting engagement will be for a period of up to 36 months, and he will be eligible to receive consulting fees comparable to, but less than, his cash compensation as Chief Executive Officer, along with continuing to receive certain benefits.

Robert L. Laurent, Jr., Chief Executive Officer and President of the Company, has been appointed to the Board of Directors.

Regarding Mr. Mitchell`s retirement, Mr. Robert L. Laurent, Jr. said, “In founding and leading this Company for over four decades, Bill has achieved remarkable and sustained success in developing engineering solutions across a wide variety of markets, in developing a solid and tenured team of dedicated professionals, and in establishing customer relationships and a reputation for integrity. ETC thanks Bill for his achievements, and ETC will seek to further strengthen relationships and to build upon that foundation.”

SOUTHAMPTON, PA, USA, September 18, 2014 – Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) today announced that the Company is making a management transition. H.F. (“Gerry”) Lenfest has been named Chairman of the Board, and Mr. Robert (“Bob”) L. Laurent, Jr. has been named Chief Executive Officer, while continuing as President. The Chairman and Chief Executive Officer positions were formerly held by William F. Mitchell, Sr.

Mr. Laurent has served as President of the Company since November 19, 2013, and prior to being promoted to President, served as Chief Financial Officer from June 2011. From 1980 to 2008, Mr. Laurent was with Fedders Corporation where he served as Executive Vice President and Chief Financial Officer from 1987 to 1998 and from 2004 to 2008. From 1998 to 2004, Mr. Laurent served as Executive Vice President – Acquisitions and Alliances. From 2008 through 2010, Mr. Laurent served as a private consultant. Mr. Laurent has extensive experience in international business, strategic planning, leadership and finance.

With respect to ETC’s Board of Directors, in addition to Mr. Lenfest being appointed Chairman, George K. Anderson, M.D. will be appointed as Vice Chairman.

Mr. Lenfest said, “I can speak for the Board in thanking Bill for his efforts. At the same time, the Board welcomes Bob Laurent to his new role in leading the Company, and looks forward to having the benefit of his skills, experience, and leadership in taking ETC forward.” Implementation of these changes will commence today.

About ETC: ETC designs, manufactures, and sells software driven products and services used to recreate and monitor the physiological effects of motion on humans, and equipment to control, modify, simulate and measure environmental conditions. Our products include aircrew training systems (aeromedical, tactical combat, and general), disaster management systems, sterilizers (steam and gas), environmental testing products, hyperbaric chambers, and other products that involve similar manufacturing techniques and engineering technologies. ETC’s unique ability to offer complete systems, designed and produced to high technical standards, sets it apart from its competition. ETC is headquartered in Southampton, PA. For more information about ETC, visit http://www.etcusa.com/.

SOUTHAMPTON, PA, USA, September 16, 2014 – Environmental Tectonics Corporation’s (OTC Pink: ETCC) (“ETC” or the “Company”) Simulation Division (“ETC Simulation”), located in Orlando, FL, has been awarded a contract to deliver an Advanced Disaster Management Simulator (ADMS) training system to the Jordan General Directorate of Civil Defense (“GDCD”).

The installed training system will be located at the Civil Defense Academy and used to train staff in critical decision making for Emergency Response and Disaster Management. Among the many natural and/or man-made disaster scenarios that can be trained for in the GDCD system are earthquakes, floods, storm damage, structural fires and collapses, aircraft incidents, forest fires, mass casualty triaging, industrial fires, and CBRNE emergencies.

The customized ADMS system will include integrated maps of Jordan, a high fidelity Jordanian city environment, and localized simulated vehicles with crews to enhance the situation awareness and logistics of training. This localization is required to train Jordanian disaster management plans and standard operating procedures. The After Action Review tool will include voice recording capabilities for use during the playback of training communications during an exercise replay. The GDCD system will be delivered with both an Arabic and English User Interface.

An ADMS-Fire Hose Trainer, the augmented reality firefighting training simulator, will also be delivered to provide firefighters with an effective training system for tactical firefighting and ventilation techniques. The fire hose trainer can be connected as a module to the ADMS system.

SOUTHAMPTON, PA, USA, September 15, 2014 – Environmental Tectonics Corporation’s (OTC Pink: ETCC) (“ETC” or the “Company”) NASTAR® Center, the premier commercial space training and research center in the world has recognized 12 teachers from area schools as Distinguished Educators. Teachers who attend 40 hours of training and participate in at least one equipment-based activity at the NASTAR Center receive this award.

The 12 teachers who earned this distinction in 2014 are:

Amanda Birnbrauer, Pope John Paul II High School Jeanne Costello, Our Lady of Calvary School Sarah Crandall, Our Lady of Mt. Carmel School Ahngelique Davis, Evesham Township Schools, NJ Eileen Dunkleberger, Our Lady of Calvary School David Farina, Manheim Township High School Jaskiran Kaur, Boy’s Latin High School Jordana Lacy, Abington High School Susan Macrone, St. Joseph/St. Robert School Joanne O’Hanlon, St. Agnes Sacred Heart School Gregory Severino, Our Lady of Calvary School Joseph Smith, Our Lady of Good Counsel School

Since 2010, 168 teachers from 13 states have attended professional development programs at the NASTAR Center. Of this group, only 45 have earned the Distinguished Educator honor.

In order to promote science, technology, engineering, and mathematics (STEM) education, the NASTAR Center offers professional development programs for teachers. Educators who attend NASTAR Center programs can pilot an aircraft simulator, fly a space launch and reentry in a centrifuge, or make an 8,000-foot ascent in an altitude chamber as they learn hands-on techniques they can apply in their classrooms.

William F. Mitchell, Chairman and CEO of ETC, stated “We are pleased to open the NASTAR Center to teachers for this program. This nation is facing future shortages of skilled engineers and scientists. We hope attendance at NASTAR Center Professional Development classes will help teachers inspire young people to pursue technical careers.”

SOUTHAMPTON, PA, USA, August 18, 2014 – Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) announced today the award of two separate contracts for the upgrade of two altitude simulation chambers originally provided by ETC to the Federal Aviation Administration (“FAA”) and currently used for training and research at their Oklahoma City, OK facility.

The original contracts were for the sale of two altitude simulation chambers to the FAA in 1996. The most recent contract awards will upgrade essential components in the vacuum and environmental system, and upon completion of the upgrades, the chambers will have increased operational capability and enhanced safety.

Altitude simulation chambers are typically utilized to provide altitude training to aircrews and to create hypoxic research environments for a variety of investigational scenarios.

“We feel honored to have such a positive and longstanding working relationship with the FAA in a variety of areas”, stated William F. Mitchell, Chairman and CEO of ETC.” Altitude simulation training is a must for any private, commercial, or military aircrew, to ensure the highest degree of preparedness for flight”.

SOUTHAMPTON, PA, USA, August 8, 2014 – Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) announced today the final acceptance of two altitude training and research chambers (www.etcaircrewtraining.com/hypobaric-chamber-altitude-chamber) provided to the Spanish Air Force (SPAF) and installed at their aerospace medical training center (CIMA) in Madrid, Spain.

The first contract required moving the original chamber, first sold by ETC to the SPAF in 1978, from its initial location to the new CIMA, located at Torrejon Air Force Base.

The second chamber, a new Falcon altitude chamber, Model 12/4, was delivered, integrated, man-rated, and commissioned into service at the new CIMA location. The Falcon family of altitude chambers provides the most current technology available in altitude simulation. Both systems are able to support a host of research and operational missions.

During a tour of the new facility, Spain`s Minister of Defense, Pedro Morenes, was present and provided an overview of the chamber and ETC`s technology. He thanked the team who were onsite for a job well done.

“Their pilots will have expanded and enhanced capabilities in this area,” said William F. Mitchell, Chairman and CEO of ETC. “Altitude simulation training is critical for any military with personnel who fly or perform other excercises at high altitudes. We are grateful for our positive and productive relations with the SPAF.”

SOUTHAMPTON, PA, USA, July 29, 2014 – Environmental Tectonics Corporation`s (OTC Pink: ETCC) (“ETC” or the “Company”) Simulation Division (“ETC Simulation”), located in Orlando, FL, announced today it has been awarded a contract by the Jiangsu Fire Brigade in China to deliver an ADMS training suite. The customized ADMS-Command system will be used to train for petrochemical and industrial emergency response.

The Advanced Disaster Management Simulator (“ADMS”) suite will include an On-Scene Incident Command Room with a 180-degree immersion theater screen and eight field unit positions. Within the training facility, an observer theater will be constructed inside the immersion room for briefings, training observation, and evaluation.

The customized system will be a full Chinese version of ADMS-Command including response vehicles and crews, casualties and bystanders, street signs, and street names, as well as a Chinese User Interface. In addition to these, new response vehicles will be added including ladder trucks, aerial platforms, high capacity water pumps, high capacity foam trucks, and an earthquake rescue truck.

The Jiangsu Fire Brigade will utilize ADMS to train for both petrochemical and industrial emergency response, and also with special attention given to large scale structural fires in high-rise buildings. To meet these requirements, ETC Simulation will develop a petrochemical factory.

“We welcome Jiangsu Fire Academy to our global user community, and are excited to expand our footprint within Asia as we strive to provide the best simulation training platform for emergency responders worldwide,” said Marco van Wijngaarden, President of ETC Simulation. “We just returned from the Design Review Meeting and the training facility has a fantastic layout. The observer theater will enhance the learning experience. With ADMS, Jiangsu will be able to train standard operating procedures for petrochemical and high-rise building fire incidents, and use all specialized vehicles as they have available in the field.”

]]>https://www.etcusa.com/etc-simulation-awarded-contract-for-fire-training-center-at-the-jiangsu-fire-brigade-china/feed/0ETC Ships Chambers Three and Four of Four Research Altitude Chambers to United States Air Forcehttps://www.etcusa.com/etc-ships-chambers-three-and-four-of-four-research-altitude-chambers-to-united-states-air-force/ https://www.etcusa.com/etc-ships-chambers-three-and-four-of-four-research-altitude-chambers-to-united-states-air-force/#commentsThu, 17 Jul 2014 18:57:32 +0000https://www.etcusa.com/?p=3824Continue reading →]]>

SOUTHAMPTON, PA, USA, July 17, 2014 – Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) announced today the shipment of the third and fourth chambers, completing the requirement of four Research Altitude Chambers to the 711th Performance Wing at Wright Patterson Air Force Base in Dayton, OH, USA.

The third and fourth altitude chambers, which are part of a total suite of four chambers sold to the U.S. Air Force, were shipped on June 24, 2014 and July 2, 2014, respectively. The chambers are currently undergoing installation, and will be integrated with the facility, as well as the other two chambers that are currently onsite.

Valued at over $37 million, the suite of research chambers allows maximum flexibility for the design and configuration of unique test scenarios under a wide range of environmental conditions. Each of the four chambers will have its own unique internal layouts and compartmentalization. Three of these four chambers will be “man-rated” allowing human occupancy for ongoing initiatives. The fourth chamber will be utilized for equipment and various research testing scenarios.

ETC`s suite of chambers will support the operational missions for the Aeromedical Research Mission that include:

Human performance assessment in moderate and high altitude conditions

Aircrew equipment development, qualification and Man Rating

Operationally focused aeromedical research

Non-medical engineering test work for aircraft/weapons programs

States William F. Mitchell, Chairman & CEO of ETC, “We are pleased to be finalizing this project and look forward to the commissioning and man-rating process.”

ETC’s Annual Meeting of the Shareholders was held at the executive offices of the Company, 125 James Way, County Line Industrial Park, Southampton, Pennsylvania 18966 on Tuesday, July 15, 2014, at 10:00 a.m., with shareholders voting favorably on the following two proposals:

SOUTHAMPTON, PA, USA, July 14, 2014 – Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) announced today the recent award of a new contract totaling in excess of $2.4 million for the Sterilization Systems Group (“SSG”). The contract is for a comprehensive control system hardware and software upgrade for legacy controllers for a large medical device manufacturer.

The project includes upgrading eleven (11) sterilizer control systems with ETC`s Pro-GENESIS Advantage(TM) and integrating control and monitoring of 33 individual room controllers into one Supervisory Control and Data Acquisition (SCADA) System. The new control scheme will allow the customer to integrate disparate operations and information into one data warehouse and to consolidate all process information and reporting while meeting new industry standards for control and electronic record-keeping.

David Mitchell, Vice President and Business Unit Manager for ETC`s SSG stated, “We are very pleased to have been selected for this project. ETC`s investment in advanced control technologies and software is being recognized within the industry. There is a very large installed base of legacy control systems that don`t meet the international standards for control and reporting, and ETC is perfectly positioned to help those organizations upgrade their systems in a cost-effective and timely manner. We expect this part of our business to continue to grow well into the future.”

SOUTHAMPTON, PA, USA, July 14, 2014 – Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”), announced today the signing of a contract with a leading military in South Asia for the procurement of three of its state-of-the-art Ejection Seat Simulators (ESS). The award followed a highly competitive bid process that included field evaluation trials of all potential vendors where it was concluded that ETC`s technology was superior. The new ESS will enable pilots to practice when to make the correct decision to eject, along with the proper procedures to employ before actually ejecting from the aircraft. The systems will be delivered to three separate locations, with installations expected to begin in early 2016.

“We`re very pleased with the opportunity to work with such a significant player in the global defense market,” said William F. Mitchell, Chairman & CEO of ETC. “It`s a great step for the Company, and will be an important project for our continued international expansion. We look forward to training their aircrew for many years to come.”

ETC`s groundbreaking ESS combines high-fidelity flight simulation and procedural training to replicate real world ejection situations. The system allows pilots to practice the correct decision-making and emergency procedures for successfully ejecting from the aircraft. The ESS design enhances the training experience by creating a realistic simulation of the ejection sequence that includes simulated aircraft emergencies. The device immerses the pilot into the flight scenario by constructing all of the events leading up to the ejection sequence in a dynamic flight environment; thereby, training the pilot in both the decision to eject and the correct ejection procedures, making it the premier ejection trainer.

As required by the contract, ETC will also provide a “turn-key” solution for this procurement, including detailed building designs and necessary construction for the installation of each simulator. Upon project completion, ETC will have manufactured and installed 22 ESS`s worldwide.

Net (Loss) Income Attributable to ETC Net loss attributable to ETC was $197 thousand, or $0.02 diluted loss per share, in the 2015 first quarter, compared to $31 thousand of net income attributable to ETC during its fiscal 2014 first quarter ended May 31, 2013 (the “2014 first quarter”), equating to a $0.01 diluted loss per share. The $0.2 million variance reflects a decrease in income before income taxes of $0.4 million due primarily to a $0.9 million decrease in gross profit, resulting from a combination of both lower net sales and lower gross profit margin percentage, offset in part, by a $0.5 million decrease in operating expenses, resulting from a decrease in commissions due to lower net sales and an on-going effort to reduce non-revenue generating expenses. The $0.4 million decrease in income before income taxes was offset, in part, by a $0.2 million variance between the income tax benefit recorded in the 2015 first quarter and the income tax expense recorded in the 2014 first quarter.

Net Sales Net sales in the 2015 first quarter were $10.7 million, a decrease of $1.9 million, or 15.1%, compared to 2014 first quarter net sales of $12.6 million. The reduction reflects decreased ATS sales to the U.S. Government and International customers, and decreased sales of monoplace chambers to Domestic customers, offset in part, by increased sales of our other Commercial/Industrial products to Domestic customers. Given the current progress made on U.S. Government contracts in the Company’s sales backlog, the Company anticipates the concentration of sales to the U.S. Government will continue to lessen in fiscal 2015.

Gross Profit Gross profit for the 2015 first quarter was $2.8 million compared to $3.7 million in the 2014 first quarter, a decrease of $0.9 million, or 23.9%. The significant decrease in gross profit was a combination of both lower net sales and lower gross profit margin percentage due to inefficiencies as a result of additional work required on several contracts, for which we are currently pursuing recovery. On April 24, 2014, we reached a favorable settlement agreement on the first of these recoveries that partially offset the effects of the additional work. Gross profit margin as a percentage of net sales decreased to 26.4% for the 2015 first quarter compared to 29.5% for the 2014 first quarter.

Operating Expenses Operating expenses, including sales and marketing, general and administrative, and research and development, for the 2015 first quarter were $2.9 million, a decrease of $0.5 million, or 14.0%, compared to $3.4 million for the 2014 first quarter. The decrease is primarily the result of a decrease in commissions due to lower net sales and an on-going effort to reduce non-revenue generating expenses, offset in part, by an increase in legal fees associated primarily with the aforementioned recovery effort.

Interest Expense, Net Interest expense, net, for the 2015 first quarter was $149 thousand compared to $172 thousand in the 2014 first quarter, a decrease of $23 thousand, or 13.4%, due primarily to a lower level of bank borrowing, which was achieved by a significant increase in cash generated by operating activities.

Cash Flows from Operating, Investing, and Financing Activities During the 2015 first quarter, as a result of a decrease in accounts receivable and costs and estimated earnings in excess of billings on uncompleted long-term percentage of completion (“POC”) contracts, the Company generated $5.1 million of cash from operating activities compared to $4.9 million of cash used in operating activities during the 2014 first quarter. Under POC revenue recognition, these accounts represent the timing differences of spending on production activities versus the collecting of customer payments.

Cash used for investing activities primarily relates to funds used for capital expenditures of equipment and software development. The Company’s investing activities used $0.4 million in the 2015 first quarter compared to $0.3 million in the 2014 first quarter.

The Company’s financing activities used $4.8 million of cash in the 2015 first quarter, which primarily reflected repayments under the Company’s various lines of credit and payments on the Term Loan, and was offset, in part, by a decrease in restricted cash. In the 2014 first quarter, net cash provided by financing activities totaled $3.7 million, primarily from borrowings under the Company’s various lines of credit and a decrease in restricted cash, offset in part, by payments on the Term Loan.

Southampton, PA, USA, June 11, 2014 – (ACN Newswire) – Environmental Tectonics Corporation’s (OTC Pink: ETCC)(“ETC” or the “Company”) Simulation Division, located in Orlando, Fla., has announced today the signing of a contract with Concordia University Portland to deliver a complete, multi-level ADMS-Command training suite to its’ new Homeland Security Simulation Center in Portland, Oregon U.S.

The Advanced Disaster Management Simulator (“ADMS”) suite, which will be housed at Concordia’s Homeland Security Simulation Center at the new Columbia River Campus, includes an On-Scene Incident Command Room with a 180-degree immersion theater screen, four field unit positions and an Emergency Operations Center (“EOC”) room, designated to facilitate integrated and multi-level team training. The EOC station, located in a separate room from the incident command and field unit stations, includes a multi-monitor wall for displaying 2D mapping and logistics information, as well as the 3D on-scene visuals such as a helicopter or CCTV view. In addition to the installed ADMS-Command Suite, a portable ADMS-Command system has already been delivered to Concordia for use during off-site training exercises and events. The portable system can be connected to the installed system upon completion.

The Simulation Center will be available for rental to groups outside the university and beginning this fall, ADMS will be integrated into the main curriculum for the Homeland Security and Emergency Preparedness Programs at Concordia University. Students will be faced with any number of virtual incidents, ranging from traffic accidents to a terrorist attack involving chemical releases. The artificial intelligence and physics-based effects embedded into all ADMS systems allow the scenario to unfold as it would in the real world, requiring the students to make real-time decisions as the incident progresses.

“The goal of Concordia’s Homeland Security degree is simple: to provide our students the knowledge, skills and leadership abilities they’ll need in their homeland security and emergency management careers and to prepare servant leaders to change the world,” said Scott Winegar, Concordia’s Director of Homeland Security. “By offering this hands-on learning experience, we are bridging the gap between classroom theory and real world experience.”

Net Income Attributable to ETC Net income attributable to ETC was $0.6 million, or $0.01 per diluted share, in fiscal 2014 versus $4.9 million, or $0.19 per diluted share, in fiscal 2013; a decrease of $4.3 million, or 87.9%. The decrease in net income attributable to ETC reflects a decrease in income before income taxes of $7.5 million, or 85.6%, due primarily to a $10.3 million decrease in gross profit, resulting from a combination of both lower net sales and lower gross profit margin percentage, offset by a $2.8 million decrease in operating expenses, resulting primarily from an on-going effort to reduce non-revenue generating expenses.

Net Sales Net sales for fiscal 2014 were $48.3 million, a decrease of $14.5 million, or 23.1%, from fiscal 2013. The reduction reflects decreased sales within our Aerospace segment to the U.S. Government and decreased sales of sterilizers and environmental testing and simulation devices to Domestic customers, offset in part, by increased sales within our Aerospace segment to International customers. Given the current progress made on U.S. Government contracts in the Company’s sales backlog, the Company anticipates the concentration of sales to the U.S. Government will continue to lessen in fiscal 2015.

Gross Profit Gross profit for fiscal 2014 decreased by $10.3 million, or 41.5%, compared to fiscal 2013. The significant decrease in gross profit was a combination of both lower net sales and lower gross profit margin percentage due to inefficiencies as a result of additional work required on several contracts, for which we are currently pursuing recovery. On April 24, 2014, we reached a favorable settlement agreement on the first of these recoveries that partially offset the effects of the additional work. Gross profit margin as a percentage of net sales decreased to 30.2% in fiscal 2014 compared to 39.6% in fiscal 2013.

Operating Expenses Operating expenses, including sales and marketing, general and administrative, and research and development, for fiscal 2014 were $12.1 million, a decrease of $2.8 million, or 18.9%, compared to $14.9 million for fiscal 2013. This decrease is primarily the result of an on-going effort to reduce non-revenue generating expenses, as well as lower commissions due to lower net sales, offset in part, by an increase in research and development expenses due to less grant payments received to offset expenses in fiscal 2014.

Interest Expense, Net Interest expense, net for fiscal 2014 was $0.8 million compared to $1.0 million in fiscal 2013, a decrease of $0.2 million, or 19.6%, despite a higher level of bank borrowing due primarily to the results of the 2012 Financial Restructuring.

Fiscal 2014 Fourth Quarter Results of Operations

Net Income Attributable to ETC Net income attributable to ETC was $0.3 million, or $0.01 per diluted share, in the fiscal 2014 fourth quarter versus $0.8 million, or $0.04 per diluted share, in the fiscal 2013 fourth quarter; a decrease of $0.5 million, or 62.4%. The decrease in net income attributable to ETC reflects a decrease in income before income taxes of $0.9 million, or 55.7%, due primarily to a $2.2 million decrease in gross profit, resulting from a combination of both lower net sales and lower gross profit margin percentage, offset by a $1.4 million decrease in operating expenses, resulting primarily from an on-going effort to reduce non-revenue generating expenses.

Net Sales Net sales for the fiscal 2014 fourth quarter were $11.6 million, a decrease of $15.1 million, or 22.7%, compared to the fiscal 2013 fourth quarter. The reduction primarily reflects decreased sales within our Aerospace segment to the U.S. Government. Given the current progress made on U.S. Government contracts in the Company’s sales backlog, the Company anticipates the concentration of sales to the U.S. Government will continue to lessen in fiscal 2015.

Gross Profit Gross profit for the fiscal 2014 fourth quarter decreased by $2.2 million, or 38.3%, compared to the fiscal 2013 fourth quarter. The significant decrease in gross profit was a combination of both lower net sales and lower gross profit margin percentage due to inefficiencies as a result of additional work required on several contracts, for which we are currently pursuing recovery. On April 24, 2014, we reached a favorable settlement agreement on the first of these recoveries that partially offset the effects of the additional work. Gross profit margin as a percentage of net sales decreased to 30.9% for the fiscal 2014 fourth quarter compared to 38.7% for the fiscal 2013 fourth quarter.

Operating Expenses Operating expenses, including sales and marketing, general and administrative, and research and development, for the fiscal 2014 fourth quarter were $2.6 million, a decrease of $1.4 million, or 34.5%, compared to $4.0 million for the fiscal 2013 fourth quarter. This decrease is primarily the result of an on-going effort to reduce non-revenue generating expenses, as well as lower commissions due to lower net sales, offset in part, by an increase in research and development expenses due to less grant payments received to offset expenses in the fiscal 2014 fourth quarter.

Interest Expense, Net Interest expense, net for both the fiscal 2014 fourth quarter and the fiscal 2013 fourth quarter was $0.2 million due to the results of the 2012 Financial Restructuring having an equivalent effect on both quarters.

Cash Flows from Operating, Investing, and Financing Activities During fiscal 2014, as a result of an increase in costs and estimated earnings in excess of billings on uncompleted long-term percentage-of-completion (“POC”) contracts and decreases in accounts payable, customer deposits, and other accrued liabilities, the Company used $0.6 million of cash in operating activities compared to $7.3 million of cash provided by operating activities in fiscal 2013.

Cash used for investing activities primarily relates to funds used for capital expenditures in property, plant, and equipment and software development. The Company’s fiscal 2014 investing activities used $1.4 million, which consisted primarily of equipment and software enhancements for our ATFS technology, and costs to upgrade CIS demonstration equipment and existing information technology systems. This is an increase of $0.1 million from cash used in investing activities in fiscal 2013. The Company’s financing activities generated $0.1 million during fiscal 2014 as compared to using $6.4 million in fiscal 2013. The principal uses of cash were $4.4 million of payments on the Term Loan and $0.4 million in Preferred Stock dividends. These were offset by $3.7 million in borrowings under the Company’s various lines of credit and a $1.2 million reduction in restricted cash.

Board of Directors Actions On May 28, 2014, the Company’s Board of Directors (the “Board of Directors”) unanimously approved a resolution to amend and restate the Company’s bylaws to, among other things, amend certain governance provisions to reflect recent changes at the Company (e.g., bifurcation of the roles of Chief Executive Officer and President and no longer being an SEC reporting company), to update the bylaws under the Pennsylvania Business Corporation Law, and to make certain other conforming and technical changes. Some of these amendments relate to the composition of the Board of Directors and its committees, advance notice provisions for shareholder meetings, indemnification, and action by written consent. The Board of Directors also approved an amendment to Section 8(b) of the Statement With Respect to Shares of the Series E Preferred Stock of the Company, clarifying the composition of the Board of Directors. These amendments were also approved by the written consent of the holder of all of the Series E Preferred Stock and holders of Common Stock. A copy of the amended and restated bylaws and the amendment to Section 8(b) are available to shareholders upon request.

]]>https://www.etcusa.com/etc-announces-fiscal-2014-full-year-and-fourth-quarter-results/feed/0ETC’s Sterilization Systems Group Receives Over $2.5 Million in New Contractshttps://www.etcusa.com/etcs-sterilization-systems-group-receives-over-2-5-million-in-new-contracts/ https://www.etcusa.com/etcs-sterilization-systems-group-receives-over-2-5-million-in-new-contracts/#commentsThu, 01 May 2014 17:02:46 +0000https://www.etcusa.com/?p=3740Continue reading →]]>

SOUTHAMPTON, PA, USA, May 1, 2014 – Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) announced today the recent awards of several new contracts totaling in excess of $2.5 million for the Sterilization Systems Group (“SSG”). The contracts combined include a control system and software upgrade for an existing customer, a large sectional autoclave for a biomedical research firm, and four Ethylene Oxide sterilizers for medical device sterilization.

The awarded contracts are a result of ETC’s capability to offer flexible and customizable solutions for the lab research, life science, and medical device industries.

David Mitchell, Vice President and Business Unit Manager for ETC’s SSG stated, “These projects validate our approach to delivering unique engineering solutions to an increasingly sophisticated marketplace. Our ability to rapidly design and produce unique sterilization systems, along with the control systems software that accompany these solutions, has led to our continued success as a world-class provider.”

SOUTHAMPTON, PA, USA, April 16, 2014 – Aircrew Training Systems (“ATS”), a division of Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”), announced today that it signed a contract with the Air Force Life Cycle Management Center (“AFLCMC”) to provide up to four spatial disorientation flight simulators following a competitive bidding process. The AFLCMC selected ETC’s GYRO IPT II (Integrated Physiological Trainer) to fulfill the requirements of their new Spatial Disorientation (SD) Training System Program. The GYRO IPT II will support the SD training requirements in the Air Education and Training Command Student Undergraduate Pilot Training syllabus. The system will expose undergraduate pilots and aircrew to typical vestibular and visual illusions found in aviation, enabling them to recognize, confirm, prevent and recover from SD. The four units are scheduled for delivery to Sheppard AFB TX, Laughlin AFB TX, Columbus AFB MS and Vance AFB OK, with installation expected to begin in the spring of 2015.

“We are thrilled to be selected as the contractor for such an important program,” said Alper Kus, Vice President of ATS. “Spatial disorientation is still a major contributor to aircraft mishaps. This system will help pilots to better handle the effects of SD and ultimately lead to a safer flight environment for all aircrew.”

ETC’s GYRO IPT II provides pilots with a hands-on, realistic, full motion, spatial disorientation flight training experience. While in control of a simulated flight, the pilot can be exposed to a variety of selected disorienting illusions. Unlike simple disorientation demonstrators, a pilot in the GYRO IPT II has full closed loop control of the simulation before, during and after the illusion. This capability creates a fully interactive flight training environment where the pilot must maintain control of the simulator and fly through the illusion to a successful resolution during training.

This acquisition marks the fourth contract awarded to ETC by the USAF in the past five years. During 2009 and 2010, ETC was also selected to provide its Authentic Tactical Fighting System (ATFS-400) and a suite of four Altitude Chambers to Wright-Patterson AFB OH. In 2012, ETC received an additional contract for an Altitude Chamber to be delivered to the Spanish Air Force via Foreign Military Sales (FMS).

SOUTHAMPTON, PA, USA, March 20, 2014 – Aircrew Training Systems (“ATS”), a division of Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”), announced today the signing of a contract with the United Arab Emirates Air Force (“UAEAF”) for the procurement of its state-of-the-art Pilot Selection System (“PSS”). The PSS will help the UAEAF to select the most qualified pilot candidates to continue on to flight training school, and will be installed at Khalifa bin Zayed Air College in Al Ain, UAE next spring.

ETC’s PSS is an integrated testing program used to determine whether candidates have the required aptitude for becoming a pilot. It evaluates potential aircrew by utilizing extensive cognitive and psychomotor testing. After the most qualified candidates are selected, their ability to execute conscious attention management is assessed in a dynamic motion-based flight simulator to fully determine their suitability for flight training. The system is designed to evaluate large numbers of pilot candidates in a short period of time to select the most qualified flight crew to continue on to training.

“We are very pleased to be working once again with the UAE Air Force,” said Alper Kus, Vice President of ATS. “This advanced system will not only provide them with a reliable means of screening pilot candidates, but save valuable training resources in the process.”

ETC has been supplying the UAE Armed Forces with training equipment for nearly three decades, since it first commissioned their Aerospace Medical Training Center in Abu Dhabi in 1986.

SOUTHAMPTON, PA, USA, March 19, 2014 – Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) announced today that Mr. Ken Rideout, Vice President of ETC’s BioMedical Systems, has been selected as a keynote speaker during the Pre-Con Program at the Diabetic Foot Global Conference (“DFCon”) in Los Angeles, CA on Wednesday, March 19, 2014.

The focus of the Pre-Con Program is Nuts & Bolts of a Hyperbaric & Wound Care Center. Mr. Rideout will discuss the topics of “Assessing Your Market: Hyperbaric” and “Equipment and Site Selection.”

“I am honored to have been chosen to speak on this very important topic in diabetic wound care,” states Ken Rideout, “I am looking forward to leaving the audience with some very valuable insight regarding HBOT chamber selection.”

ETC’s monoplace hyperbaric chambers, provided by the company’s ETC BioMedical Systems Group, include BARA•PRESS(TM) and SMOOTH-RIDE(TM). BARA•PRESS is the software which can control, as well as record, the treatment, allowing the operator to monitor the patient more easily, consistently and accurately. SMOOTH-RIDE™ is a pressure change technology that enhances patient comfort by reducing the incidence of barotrauma by 67 percent, ensuring more patients complete all their treatment sessions. The BARA-MED “Select” also offers an undercarriage gurney storage area.

SOUTHAMPTON, PA, USA, March 14, 2014 – Aircrew Training Systems (“ATS”), a division of Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”), announced today that it was selected by the U.S. Army Contracting Command to provide the Colombian Air Force (“FAC”) with a spatial disorientation flight simulator following a competitive bidding process. The GYRO IPT II (Integrated Physiological Trainer) will help FAC pilots to recognize in-flight conditions that contribute to spatial disorientation and how to fly to a successful resolution. The new system will be installed at the FAC Aerospace Medicine Center (CEMAE) in Bogotá, Colombia next spring.

ETC’s GYRO IPT II provides pilots with a hands-on realistic, full motion, spatial disorientation flight training experience. While in control of a simulated flight, the pilot can be exposed to a variety of selected disorienting illusions. Unlike simple disorientation demonstrators, a pilot in the GYRO IPT II has full closed loop control of the simulation before, during and after the illusion. This capability creates a fully interactive flight training environment where the pilot must maintain control of the simulator and fly through the illusion to a successful resolution during training.

“Spatial disorientation remains a major cause of aircraft accidents,” said Alper Kus, Vice President of ATS. “We are pleased to provide the Colombian Air Force with a training solution that will significantly enhance pilot safety and lead to tremendous cost savings in the near future.”

SOUTHAMPTON, PA, USA, March 6, 2014 – The National AeroSpace Training And Research (NASTAR®) Center (www.nastarcenter.com), the premier commercial space training and research center in the world, will once again host its popular NASTAR Camp program for students in grades 2 – 12.

NASTAR Camp sessions will take place Monday – Friday, from 9:00 AM – 4:00 PM at our facilities located at 125 James Way, Southampton, PA 18966. The NASTAR Camp curriculum has been structured to be fun, while it reinforces the Pennsylvania Academic Standards for Science and Technology and Engineering (STEM) Education. All curricula and activities are age and grade appropriate.

Each week-long session has a particular theme with relevant activities that comprise about half the program; the rest of the week students assemble and fly balsa gliders, pilot an aircraft simulator, build and launch model rockets, and engage in other perennial favorite activities. The emphasis throughout the week is on hands-on activities and projects that engage students and foster inquiry-based learning to help them better understand science and technology.

William F. Mitchell, Chairman and CEO of ETC, stated “We are pleased to open the NASTAR Center to students for this program. This nation is facing future shortages of skilled engineers and scientists. We hope NASTAR Camp will inspire some of these young people to pursue technical careers.”

The cost for NASTAR Camp is $250.00 per week. For NASTAR Camp enrollment information, please contact Greg Kennedy at (215) 355-9100, X 1512, or gkennedy@nastarcenter.com. A registration packet may also be downloaded from the NASTAR Center website, www.nastarcenter.com.

SOUTHAMPTON, PA, USA, February 28, 2014 – Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) announced today that ETC‘s AeroMedical Training Institute (AMTI) recently completed training of Ecuadorian Air Force Pilots. The Ecuadorian Air Force is responsible for the protection of Ecuador’s airspace as well as participating in many humanitarian and logistic missions into the Amazon-region of the country.

The completion of high G training, places the Ecuadorian Air Force as one of the first countries in the world to utilize ATFS-400 technology for combining basic G training with tactical flight training. According to Glenn King, the AMTI’s Director of Training, “Prior to their high G training, the pilots were only capable of sustaining approximately 4 – 5 G’s. Upon completion of training, all pilots were able to successfully employ weapons and score several bandit “kills” while sustaining up to 9 G’s.”

Ken Ginader, ETC’s Director of Business Development for Tactical Flight Training states, “ETC has conducted several tactical training events in the last six years and has noticed most fighter pilots believed they knew how to perform the Anti-G Straining Maneuver (AGSM), but in reality demonstrated otherwise. However, following three days of AMTI training for Air Combat Maneuvering (ACM) engagements, every fighter pilot relearned how to perform a proper AGSM. With budgetary constraints resulting in a reduction of flight hours for tactical pilots in most every air force worldwide, it is important, especially from a risk management perspective, that tactical pilots conduct periodic high G training in a tactical flight training event. With the ATFS-400, it is now possible to conduct high G training while performing a tactical fight training event in flight simulation.”

The AMTI provides state of the art physiology training to clients worldwide, serving the training and research needs of the military and civil aerospace community. AMTI’s training programs are highly modular and flexible and can accommodate a wide range of aerospace training and research requirements.

Southampton, Pa., USA, February 18, 2014 – Environmental Tectonics Corporation’s (OTC Pink: ETCC)(“ETC” or the “Company”) Simulation Division, located in Orlando, Fla., has delivered for Kuala Lumpur International Airport an ADMS-ARFF simulation training system to Rosenbauer International AG (“Rosenbauer”) in Austria.

The Rosenbauer Panther simulator will be used to train the operation of an Aircraft Rescue and Firefighting (“ARFF”) truck as well as tactical positioning in the event of an aircraft emergency. The full cabin simulator will have the same layout as the real Panther vehicle as used by Malaysian Airports Holdings Berhad (“MAHB”), including a functional dashboard and center console with controls for the roof and bumper turrets. Also featured in the simulation is a geo-specific environment of the Kuala Lumpur International Airport and an Incident Commander response vehicle specifically designed to reflect those found in Malaysia.

“The full cabin ARFF simulator allows the airport fire and rescue vehicle operators to build the experience and gain the confidence necessary to perform under extreme conditions in a variety of situations, and ultimately be better prepared for real-life incidents and live-exercises. ADMS-ARFF is a green airport solution, as no fire suppression agents or live burns are involved to acquire the training necessary to operate an ARFF truck, thus saving money, minimizing risk and protecting the environment.” said Lori Bozenbury, Director of Business Development at ETC Simulation.

Located in Selangor, Kuala Lumpur International Airport is the largest airport in Malaysia and regularly ranks as one of the busiest airports in the world for international travelers.

About ETC Simulation ETC Simulation (www.ETCsimulation.com), located in Orlando, FL, specializes in virtual reality emergency response and disaster management training systems. Their hallmark product, ADMS(TM), is a proven tool for training emergency management personnel at all levels, with more than one million successful training hours completed globally.

Environmental Tectonics Corporation’s (OTC Pink: ETCC)(“ETC” or the “Company”) Simulation Division, located in Orlando, Fla., has delivered to the Serco International Fire Training Centre (“IFTC”) an Advanced Disaster Management Simulator (“ADMS”) system. An ADMS user since 2001, IFTC in Darlington, United Kingdom uses their ADMS system to train aviation and industrial firefighters, as well as response personnel.

The newly delivered system is installed in IFTC’s new dedicated virtual reality training suite located at Durham Tees Valley Airport. The training system includes British left hand driving responder vehicles and crews, civil and military aircraft, head counts in the casualty collection area for firefighters and emergency medical services. The system also has the capability to train for off-airport aircraft incidents, as well as industrial and petrochemical emergencies for training industrial responders.

“Our clients in the fire and rescue sector are the ones on the front line so they know that training should never be about ticking boxes. IFTC is known to have one of the best fire grounds of its kind anywhere in the world. By investing in the new ADMS system, we now have the versatile and relevant technology to provide a whole new dimension to the learning they will get here.” said Dennis Perkins, Director of Training at IFTC.

Accredited by the United Kingdom Civil Aviation Authority and OPITO, IFTC provides mandated training programs and recommendations of the International Civil Aviation Organization. IFTC has trained aviation firefighters and emergency responders from more than 80 countries since 1981. The centre includes 20 acres dedicated for live fire training, an ADMS virtual reality suite to train and test decision making under high pressure situations, and fully equipped classrooms to teach firefighting, rescue and incident command.

Net Income Attributable to ETC Net income attributable to ETC was $136 thousand, or $0.00 diluted earnings per share, in the 2014 third quarter, compared to $1.2 million or $0.05 diluted earnings per share, during the 2013 third quarter, representing a decrease of $1.0 million, or 88.5%. The decrease in net income attributable to ETC reflects a decrease in income before income taxes of $2.0 million due primarily to a $2.9 million decrease in gross profit, resulting from a combination of both lower net sales and lower gross profit margin percentage, offset in part, by a $0.8 million decrease in operating expenses, resulting from an on-going effort to reduce non-revenue generating expenses.

Net Sales Net sales in the 2014 third quarter were $12.3 million, a decrease of $2.8 million, or 18.5%, compared to 2013 third quarter net sales of $15.1 million. The reduction reflects decreased ATS sales to the U.S. Government and decreased sales of Commercial/Industrial products to Domestic customers, offset in part, by increased ATS sales to International customers. Given the current progress made on U.S. Government contracts in the Company’s sales backlog, the Company anticipates the concentration of sales to the U.S. Government will continue to lessen in fiscal 2014.

Gross Profit Gross profit for the 2014 third quarter was $3.6 million compared to $6.5 million in the 2013 third quarter, a decrease of $2.9 million, or 45.2%. The significant decrease in gross profit was a combination of both lower net sales and lower gross profit margin percentage due to inefficiencies as a result of additional work required on several contracts, for which we are currently pursuing recovery.

Operating Expenses Operating expenses, including sales and marketing, general and administrative, and research and development, for the 2014 third quarter were $3.0 million, a decrease of $0.8 million, or 22.3%, compared to $3.8 million for the 2013 third quarter. The decrease is primarily the result of an on-going effort to reduce non-revenue generating expenses, offset in part, by a slight increase in research and development expenses.

Interest Expense, Net Interest expense, net, for the 2014 third quarter was $224 thousand compared to $319 thousand in the 2013 third quarter, a decrease of $95 thousand, or 29.8%, despite a higher level of bank borrowing due primarily to the results of the 2012 Financial Restructuring.

Fiscal 2014 First Three Quarters Results of Operations:

Net Income Attributable to ETC Net income attributable to ETC was $307 thousand, or $0.00 diluted earnings per share, in the 2014 first three quarters, compared to $4.2 million or $0.14 diluted earnings per share, during the 2013 first three quarters, representing a decrease of $3.9 million, or 92.6%. The decrease in net income attributable to ETC reflects a decrease in income before income taxes of $6.7 million due primarily to an $8.1 million decrease in gross profit, resulting from a combination of both lower net sales and lower gross profit margin percentage, offset in part, by a $1.5 million decrease in operating expenses, resulting from an on-going effort to reduce non-revenue generating expenses.

Net Sales Net sales in the 2014 first three quarters were $36.6 million, a decrease of $11.1 million, or 23.2%, compared to 2013 first three quarters net sales of $47.7 million. The reduction reflects decreased ATS sales to the U.S. Government and decreased sales of sterilizers and environmental testing and simulation devices to Domestic customers, offset in part, by increased ATS sales to International customers. Given the current progress made on U.S. Government contracts in the Company’s sales backlog, the Company anticipates the concentration of sales to the U.S. Government will continue to lessen in fiscal 2014.

Gross Profit Gross profit for the 2014 first three quarters was $11.0 million compared to $19.0 million in the 2013 first three quarters, a decrease of $8.1 million, or 42.4%. The significant decrease in gross profit was a combination of both lower net sales and lower gross profit margin percentage due to increased costs as a result of damage to one of our devices associated with a U.S. Government contract during the testing phase and inefficiencies as a result of additional work required on several other contracts, for which we are currently pursuing recovery.

Operating Expenses Operating expenses, including sales and marketing, general and administrative, and research and development, for the 2014 first three quarters were $9.5 million, a decrease of $1.5 million, or 13.3%, compared to $11.0 million for the 2013 first three quarters. The decrease is primarily the result of an on-going effort to reduce non-revenue generating expenses, offset in part, by an increase in research and development expenses.

Interest Expense, Net Interest expense, net, for the 2014 first three quarters was $590 thousand compared to $764 thousand in the 2013 first three quarters, a decrease of $174 thousand, or 22.8%, despite a higher level of bank borrowing due primarily to the results of the 2012 Financial Restructuring.

Cash Flows from Operating, Investing, and Financing Activities: During the 2014 first three quarters, as a result of an increase in costs and estimated earnings in excess of billings on uncompleted long-term percentage of completion (“POC”) contracts and a decrease in accounts payable, the Company used $3.6 million of cash in operating activities compared to $0.3 million of cash provided by operating activities in the 2013 first three quarters. Under POC revenue recognition, these accounts represent the timing differences of spending on production activities versus collecting on long-term contracts.

Cash used for investing activities primarily relates to funds used for capital expenditures of equipment and software development. The Company’s investing activities used $1.1 million in the 2014 first three quarters compared to $0.9 million in the 2013 first three quarters.

The Company’s financing activities provided $3.0 million of cash in the 2014 first three quarters, which primarily reflected borrowings under the Company’s various lines of credit, and was offset, in part, by payments on the Term Loan. In the 2013 first three quarters, net cash used in financing activities totaled $0.6 million, primarily for repayments under the line of credit and dividends paid on Preferred Stock.

SOUTHAMPTON, PA, USA, November 19, 2013 – Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) announced today the election of Robert Laurent as the Company’s President.

Mr. Laurent, age 58, was ETC’s Chief Financial Officer since June 2011. From 1980 to 2008, Mr. Laurent was with Fedders Corporation where he served as Executive Vice President and Chief Financial Officer from 1987 to 1998 and from 2004 to 2008. From 1998 to 2004, Mr. Laurent served as Executive Vice President – Acquisitions and Alliances. Mr. Laurent was a private consultant from 2008 through 2010. Mr. Laurent is a graduate of Villanova University.

Mr. Laurent has extensive financial, international business and strategic planning experience.

Mark Prudenti, CPA, age 37, has been selected to replace Mr. Laurent as Chief Financial Officer. Mr. Prudenti has served as the Company’s Corporate Controller since July 2011. From 2008 to 2011, Mr. Prudenti served as the Financial Director at Rhoads Industries, Inc. Prior thereto he was Controller of Schmolz & Bickenbach USA from 2007 to 2008, Manager of Internal Controls at Bristol-Myers Squibb Company from 2005 to 2007, and was with Deloitte & Touche, LLP from 2000 to 2005, where he was Manager. Mr. Prudenti is a CPA and graduate of Bucknell University.

SOUTHAMPTON, PA, USA, October 23, 2013 – Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) announced today the recent award of several new contracts totaling in excess of $5.0 million in its Sterilization System Group (“SSG”). The contracts include orders for several steam sterilizers and a large order for a four chamber medical device sterilization facility.

David Mitchell, Vice President and Business Unit Manager for ETC SSG stated, “We are very pleased to have been awarded these projects. We at ETC continue to work diligently at finding unique solutions to our customer’s sterilization needs, and these contract awards are a testament to those efforts.”

Southampton, Pa., USA, October 15, 2013 – Environmental Tectonics Corporation’s (OTC Pink: ETCC) (“ETC” or the “Company”) Simulation Division, located in Orlando, Fla., developers of the Advanced Disaster Management Simulator (“ADMS”), has been recognized by Military Training Technology magazine (“MT2″) as a Top Simulation and Training Company for 2013.

ADMS, the high-end standard in interactive virtual reality training systems, simulates disasters and incidents in high-definition quality with incredible visualizations and effects. Founded upon over 40 years of true simulation technology, ADMS has physics based effects and artificial intelligence embedded into all training systems, providing trainees with a most realistic training experience. Trainees become immersed within the unscripted and open-ended scenarios, eliciting real-life behavior and field like responses.

For the military community, ADMS-Airbase provides the only simulation training system available that focuses on the unique challenges associated with emergencies and disasters on an airbase, complete with military specific aircraft, personnel and threats. Within this environment, many scenarios are possible including CBRNE incidents, aircraft accidents, structural fires, terrorist activity, hostage situations and many others.

MT2 covers all issues and developments related to the simulation and training industry as it relates to the military. Their scope of coverage includes simulation, distributed learning, visual systems, embedded training, database modeling and other training complements. MT2 is recognized as the leader in covering all aspects of military training readiness. Click here to read an article published within the October issue of MT2 exploring how ADMS is being utilizing by the Louis F. Garland Fire Training Academy at Goodfellow Air Force Base.

Net Income Attributable to ETC Net income attributable to ETC was $140 thousand, or $0.00 diluted earnings per share, in the 2014 second quarter, compared to $1.3 million or $0.04 diluted earnings per share, during the 2013 second quarter, representing a decrease of $1.2 million, or 89.2%. The decrease in net income attributable to ETC reflects a decrease in income before income taxes of $2.1 million due primarily to a $2.4 million decrease in gross profit, resulting from a combination of both lower net sales and lower gross profit margin percentage, offset in part, by a $0.5 million decrease in operating expenses, resulting from an on-going effort to reduce non-revenue generating expenses.

Net Sales Net sales in the 2014 second quarter were $11.7 million, a decrease of $4.8 million, or 29.1%, compared to 2013 second quarter net sales of $16.5 million. The decrease reflects decreased ATS sales to the U.S. Government and decreased sales of sterilizers and environmental testing and simulation devices to Domestic customers. Given the current progress made on U.S. Government contracts in the Company’s sales backlog, the Company anticipates the concentration of sales to the U.S. Government will continue to lessen in fiscal 2014.

Gross Profit Gross profit for the 2014 second quarter was $3.7 million compared to $6.1 million in the 2013 second quarter, a decrease of $2.4 million, or 39.4%. The significant decrease in gross profit was a combination of both lower net sales and lower gross profit margin percentage due to inefficiencies as a result of additional work required on several contracts.

Operating Expenses Operating expenses, including sales and marketing, general and administrative, and research and development, for the 2014 second quarter were $3.1 million, a decrease of $0.5 million, or 13.5%, compared to $3.6 million for the 2013 second quarter. The decrease is primarily the result of an on-going effort to reduce non-revenue generating expenses, offset in part, by an increase in research and development expenses.

Interest Expense, Net Interest expense, net, for the 2014 second quarter was $194 thousand compared to $231 thousand in the 2013 second quarter, a decrease of $37 thousand despite a higher level of bank borrowing due primarily to the results of the 2012 Financial Restructuring.

Fiscal 2014 First Half Results of Operations:

Net Income Attributable to ETC Net income attributable to ETC was $171 thousand, or ($0.01) diluted loss per share, in the 2014 first half, compared to $3.0 million or $0.09 diluted earnings per share, during the 2013 first half, representing a decrease of $2.8 million, or 94.3%. The decrease in net income attributable to ETC reflects a decrease in income before income taxes of $4.7 million due primarily to a $5.1 million decrease in gross profit, resulting from a combination of both lower net sales and lower gross profit margin percentage, offset in part, by a $0.6 million decrease in operating expenses, resulting from an on-going effort to reduce non-revenue generating expenses.

Net Sales Net sales in the 2014 first half were $24.3 million, a decrease of $8.3 million, or 25.4%, compared to 2013 first half net sales of $32.6 million. The decrease reflects decreased ATS sales to the U.S. Government and decreased sales of sterilizers and environmental testing and simulation devices to Domestic customers, offset in part, by increased sales within nearly all business units to International customers. Given the current progress made on U.S. Government contracts in the Company’s sales backlog, the Company anticipates the concentration of sales to the U.S. Government will continue to lessen in fiscal 2014.

Gross Profit Gross profit for the 2014 first half was $7.4 million compared to $12.5 million in the 2013 first half, a decrease of $5.1 million, or 41.0%. The significant decrease in gross profit was a combination of both lower net sales and lower gross profit margin percentage due to increased costs as a result of damage to one of our devices associated with a U.S. Government contract during the testing phase and inefficiencies as a result of additional work required on several other contracts.

Operating Expenses Operating expenses, including sales and marketing, general and administrative, and research and development, for the 2014 first half were $6.6 million, a decrease of $0.6 million, or 8.6%, compared to $7.2 million for the 2013 first half. The decrease is primarily the result of an on-going effort to reduce non-revenue generating expenses, offset in part, by an increase in research and development expenses.

Interest Expense, Net Interest expense, net, for the 2014 first half was $366 thousand compared to $445 thousand in the 2013 first half, a decrease of $79 thousand despite a higher level of bank borrowing due primarily to the results of the 2012 Financial Restructuring.

Cash Flows from Operating, Investing, and Financing Activities:

During the 2014 first half, as a result of an increase in costs and estimated earnings in excess of billings on uncompleted long-term percentage of completion (“POC”) contracts and a decrease in accounts payable, the Company used $3.2 million of cash in operating activities compared to $4.3 million of cash provided by operating activities in the 2013 first half. Under POC revenue recognition, these accounts represent the timing differences of spending on production activities versus collecting on long-term contracts.

Cash used for investing activities primarily relates to funds used for capital expenditures in equipment and software development. The Company’s investing activities used $0.6 million in the 2014 first half compared to $0.8 million in the 2013 first half.

The Company’s financing activities provided $2.5 million of cash in the 2014 first half, which primarily reflected borrowings under the Company’s various lines of credit, and was offset, in part, by payments on the Term Loan. In the 2013 first half, net cash used in financing activities totaled $3.9 million, primarily for repayments under the line of credit and dividends paid on Preferred Stock.

Amendment to the September 28, 2012 Loan Agreement:

On October 11, 2013, the Company entered into an amendment to the September 28, 2012 Loan Agreement that provided for, among other things, the following:

The Company’s Line of Credit with PNC Bank was increased from $15.0 million to $15.5 million.

Availability under the Line of Credit was increased by approximately $1.2 million as a currently outstanding letter of credit supporting bid bond shall no longer reduce availability under the Line of Credit so long as it remains outstanding.

The Term Loan, which is currently guaranteed by H.F. Lenfest (“Mr. Lenfest”), a major shareholder and member of the Board of Directors, through March 31, 2015, will be collateralized by Mr. Lenfest through that period, or until the Company’s Operating Leverage Ratio using all Senior Funded Debt in place of Adjusted Senior Funded Debt is less than 3.00 to 1, whichever occurs first. Adjusted Senior Funded Debt is defined as the sum of Senior Funded Debt minus the then outstanding principal amount of the Term Loan, and will be used for calculating Operating Leverage Ratio while the collateral is in place.

Until such time the Company’s Fixed Charge Coverage Ratio is at least 1.10 to 1, the Company cannot declare or pay any dividends on or make any distribution with respect to any class of its Preferred Stock, or purchase, redeem, retire, or otherwise acquire any such Preferred Stock.

The Company received a waiver as of the quarter ending August 30, 2013 for exceeding the permitted maximum Operating Leverage Ratio of 3.00 to 1 under the September 28, 2012 Loan Agreement and December 19, 2012 Export Import Loan Agreement. Going forward, ETC must maintain an Operating Leverage Ratio (i.e., ratio of Adjusted Senior Funded Debt to EBITDA, which is defined as earnings before interest, taxes, depreciation, and amortization) of less than 3.50 to 1 from November 29, 2013 through February 28, 2014. This ratio will reduce to 3.25 to 1 from March 1, 2014 through May 30, 2014, will further reduce to 3.00 to 1 on May 31, 2014, and will remain at that level at all times thereafter.

ETC must maintain as of the end of each fiscal quarter, on a rolling four quarters basis, a Fixed Charge Coverage Ratio (i.e. ratio of EBITDA, increased by an amount equal to the EBITDA Addback specified for such quarter end date, divided by the sum of the defined fixed charges) of at least 1.00 to 1 from November 29, 2013 through August 29, 2014. This ratio will increase to 1.10 to 1 on August 30, 2014, and will remain at that level at all times thereafter.

Effective as of the date of this amendment, the interest rate on both the Line of Credit Note and the Term Loan Note will be based on the PNC Daily Libor Rate plus a margin of 3.00%.

Southampton, Pa., USA, August 20, 2013 – Environmental Tectonics Corporation’s (OTC Pink: ETCC)(“ETC” or the “Company”) Simulation Division, located in Orlando, Fla., has been contracted by the Netherlands Institute for Safety (“IFV”) to develop an augmented reality firefighter training simulator with the objective of creating an effective and safe training environment for situations that cannot be trained live. The research department at IFV will perform field experiments to quantify the effectiveness of the training device in relation to the current live fire training methods, together with the Fire Brigades of Rotterdam and Amsterdam.

ADMS-Fire will be the first simulator from the ADMS platform with integrated motion-based sensor technology, offering a new level of immersion and realism. Among its features are a real fire hose with branch allowing the option of opening and closing of the hose, flow rate selection, and the ability to choose between jet stream and spray. As part of the project, ETC developed a residential house and barn in a countryside environment in which wayfinding, firefighting and ventilation tactics can be practiced at fire fighter and vehicle commander level to avoid instances of backdraft and flashover. The fire simulation software responds to the actions that the trainees take, and includes a scenario generator and after action reviewer.

“At IFV we are always looking for innovative solutions that contribute to critical training of emergency responders. This is a great project as subject matter experts, firefighters, researchers, educational experts and industry have come together to create a next generation training instrument for people who put their lives at risk in extreme conditions.” said Rijk van den Dikkenberg, Chief Fire Officer and Project Manager at IFV.

]]>https://www.etcusa.com/etc-simulation-to-deliver-firefighter-training-simulator-to-netherlands-institute-for-safety/feed/0ETC Announces the Appointment of James R. Wells as Vice President and General Counselhttps://www.etcusa.com/etc-announces-the-appointment-of-james-r-wells-as-vice-president-and-general-counsel/ https://www.etcusa.com/etc-announces-the-appointment-of-james-r-wells-as-vice-president-and-general-counsel/#commentsMon, 19 Aug 2013 18:06:56 +0000https://www.etcusa.com/?p=2972Continue reading →]]>

SOUTHAMPTON, Pa., August 19, 2013 – Environmental Tectonics Corporation (OTC Pink: ETCC) (“ETC” or the “Company”) today announced the appointment of James R. Wells, Esq. as the Company’s Vice President and General Counsel.

Mr. Wells, age 54, was formerly the Vice President and Associate General Counsel at Aramark Corporation where he worked from 1990 through 2013. Prior to Aramark, Mr. Wells was an Associate with Pepper Hamilton, LLP, Philadelphia, from 1984 to 1990.

Mr. Wells has a J.D. from Villanova Law School and a B.A. in Political Science and Economics from the University of Pennsylvania, Philadelphia, PA.